AI Credit Bubble May Spark Bitcoin 'Crack-Up Boom' Past $1M

Arthur Hayes, co-founder of BitMEX, predicts that the AI credit bubble could lead to a 'crack-up boom' for Bitcoin (BTC), potentially driving its price past $1 million. He warns that investors have misjudged spending on data centers and power infrastructure as high-growth tech investments rather than leveraged real estate.

Hayes believes lenders will finance excessive construction before a slowdown in AI capital expenditure exposes weaker borrowers, leading to a potential credit crisis similar to 2008. In his view, this could be followed by a government liquidity response that fuels a BTC price surge.

The scale of the commitments underpinning the AI boom is already visible, with Big Tech companies having committed about $1.09 trillion to leases for data centers, primarily for Microsoft, Meta, Oracle, Amazon, and Alphabet. This commitment represents nearly four times the roughly $285 billion in lease liabilities already recognized by these companies.

Hayes also forecasts that Ether (ETH) will reach $5,000 by year-end, stating that Maelstrom intends to build a significant position while selling out-of-the-money ETH put options.